BLACKSTONE’S TAKE
One month ago, European Central Bank President Mario Draghi’s message to financial markets was: I’ll see you in March. His message on Thursday? I’ll see you when I see you.

After setting up Thursday’s meeting as a major event, saying the ECB would by then have all the information it needed to decide whether additional stimulus was warranted, Mr. Draghi brought nothing new to the table. No interest rate cuts. No bank-lending measures. Even the low-hanging fruit, a suspension of weekly bank-funding drains that even the ultra-conservative Bundesbank supports, went untouched.

The euro, predictably, spiked higher, rising about 1% against the U.S. dollar. It is now threatening the 1.40 level against the greenback. That could further weaken inflation rates in the euro zone, which at 0.8% are far below the ECB’s target of just below 2%. Exports could also take a hit, weighing on an already fragile economy that is struggling to grow faster than 1% per year. Unemployment remains near record highs.

Unfortunately for the ECB, there’s no quick fix. Interest rates are near zero. Its preferred method of stimulating the economy, cheap bank loans, may be ineffective because the private-sector demand isn’t there, particularly in southern Europe. Large-scale asset purchases, known to many as quantitative easing or QE, are hard to do because the ECB has 18 different bond markets in the euro zone.

Mr. Draghi stressed that the ECB still has plenty of policy tools if needed. Officials discussed cutting interest rates Thursday, so that’s clearly an option. As for more dramatic measures, such as bank-lending programs and QE, “we have not shelved these projects,” Mr. Draghi said. The ECB, he said, has a “catalog” of options at its disposal.

But based on his inaction Thursday with inflation way below target and by the ECB’s own forecasts unlikely to get there even in 2016, this catalog is at risk of looking more and more like a blank piece of paper.

- By Brian Blackstone

MORNING MINUTES: KEY DEVELOPMENTS AROUND THE WORLDECB Leaves Rates Unchanged, Ready to Act if Needed. Mr. Draghi reiterated the central bank is ready to do more if needed Thursday, but refrained from introducing new measures to help spur a stronger the euro-zone recovery. The ECB left its main interest rate at a record low 0.25%, where it has been since November. It kept a separate rate on overnight bank deposits parked with the ECB at zero. The ECB also lowered its forecast for inflation this year to 1% from an earlier forecast of 1.1% in December, but said inflation would gradually rise to 1.3% in 2015 – still well short of the central bank’s target of just under 2% over the medium term. http://on.wsj.com/1fJT2JB

WSJ Interview: Fed’s Dudley Says Weather Hasn’t Changed Taper Views. New York Fed President William Dudley said Thursday recent economic weakness hasn’t changed his overall upbeat expectations for the economy this year and isn’t enough to alter the central bank’s plan to reduce its monthly bond purchases at coming policy meetings. Mr. Dudley, in an interview, also said the Fed’s 6.5% unemployment rate threshold for considering increases in short-term interest rates is “obsolete” and he would advocate scrapping it at the Fed’s next meeting March 18-19. http://on.wsj.com/P4VY8C

Fed’s Lockhart: New Interest-Rate Guidance Could Come Soon. Fed officials will likely want to revamp their guidance about the future path of interest rates if Friday’s jobs report shows the unemployment rate has fallen to 6.5%, Atlanta Fed President Dennis Lockhart said Thursday. He also said the Fed will keep gradually trimming its bond-buying program this year unless the U.S. economy takes a serious turn for the worse or inflation falls in a worrisome manner. http://on.wsj.com/1gVRSqV

Fed’s Plosser Asks Central Banks to Get Back to Basics. Central banks should give up their efforts to manipulate financial markets and return their focus to delivering durable economic growth and stable prices, Federal Reserve Bank of Philadelphia President Charles Plosser said Thursday. In a speech, Mr. Plosser said the Fed and other central banks have become “highly interventionist” since 2009 and their actions have led investors to pay too much attention to monetary-policy makers’ decisions. http://on.wsj.com/1jVUiIU

Five Things to Watch in Friday’s U.S. Jobs Report. Fed officials will be among the those parsing the Labor Department’s employment report for February, due out Friday at 8:30 a.m. EST, for clues about whether the U.S. economy is losing steam or whether the cold weather is to blame for the recent stretch of weak economic data. Here’s what to watch on Friday: http://on.wsj.com/1cdmTt3

More Britons Expect Rate Rise. A growing proportion of Britons expect interest rates to rise in the coming year, according to a Bank of England survey Friday. http://on.wsj.com/1cHqIBE

Brazil’s Central Bank Signals More Rate Increases Likely. Given the current inflation scenario, further adjustments to monetary policy could be appropriate, the central bank said Thursday, in minutes of its policy meeting last week. At the meeting, it raised its benchmark short-term interest rate by a quarter percentage point to 10.75%. http://on.wsj.com/MQta1z

Australia Interest Rates Likely to Hold at Record Low. Australian central bank governor Glenn Stevens gave the strongest hint yet that interest rates would likely remain at a record-low 2.5% for much of the year to help fight rising unemployment. http://on.wsj.com/1igx0M3

Ukraine Central Bank Official Says Banking System Safe Despite Sharp Withdrawals. People in Ukraine have withdrawn about 10% of the overall amount of deposits from banks in just more than five weeks, but the banking system isn’t at risk, a senior official at the National Bank of Ukraine said Thursday. Olena Scherbakova, head of the credit and monetary policy department at the central bank, said the amount withdrawn is “insignificant for the system and doesn’t destroy the foundation of the national banking system.” http://on.wsj.com/1fJQ7AC

SNB Suffers Loss on Lower Gold Price. A fall in the value of gold has pushed the Swiss National Bank to a $10.4 billion loss in 2013 and forced it to cancel dividends for the first time in its 107-year history. http://on.wsj.com/1gXq4SR

Now the Hard Part for Japan’s Deflation Fight. Japan’s consumer prices for months have been logging year-over-year gains of more than 1%—a step toward reaching the government’s goal of raising prices and overcoming deflation—but the main driver has been the yen’s sharp fall against the dollar, which some economists consider risky and unsustainable. http://on.wsj.com/1n1UniG

Ex-Indonesia Central Banker Charged Over Bailout. A former deputy governor of Indonesia’s central bank was charged Thursday with allegedly taking bribes and abusing power in a bank bailout, as corruption emerges as a top issue in upcoming elections. Budi Mulya denies any wrongdoing in the US$750 million bailout in 2008 of PT Bank Century, now called PT Bank Mutiara. http://on.wsj.com/1niHihF

Greek Banking System Needs Additional Capital. Greece’s four big, systemic banks will need another €5.8 billion ($8.0 billion) to shore up their fragile balance sheets, the country’s central bank said Thursday, in order to cope with a growing mountain of bad loans that have become another painful legacy of Greece’s protracted debt crisis. http://on.wsj.com/1gVASB3

Heavenly Currency Intervention Is Sought. A rising U.S. dollar has stirred many pastors in Ghana into nightly prayers for their fallen currency to rise again. “I command the resurrection of the cedi! In the name of Jesus!” preached evangelist Nicholas Duncan-Williams of a megachurch called Action Chapel, recently. Then he addressed Satan: “Take your hands off the central bank!” http://on.wsj.com/1gevCHe

GRAPHIC CONTENTU.S. Productivity in 2013 Matches 20-Year Low. Businesses struggled to squeeze much more out of their workers last year. A downward revision to fourth-quarter productivity lowered the gain for all of 2013 to just 0.5%, the Labor Department said Thursday. The small increase ties with 2011 for the weakest annual improvement since 1993. Labor productivity, or output per hour, strengthened early in the economic recovery as businesses grew more efficient. The measure increased 3.1% in 2009 and 3.3% in 2010, to mark the best annual improvement since 2003. But gains have slowed considerably since, measuring 0.5% in 2011 and 1.5% in 2012.http://on.wsj.com/1oupG1h

Beijing Plans to Spend $2.45 Trillion This Year. Here’s How. China’s Ministry of Finance offered a slew of numbers on Wednesday describing how the country plans to spend its money this year. The 2014 budget will reach an eye-popping 15.3 trillion yuan, or about $2.45 trillion–maybe not as exciting as President Obama’s $3.9 trillion proposed budget, but not exactly chump change either. Where is it all going? You can spend the day poring through the numbers, as China Real Time did. Or the crack WSJ Art Department can put them in a format that makes sense to normal eyes. (It pays to have connections.) http://on.wsj.com/MR6oGZ

RESEARCHTesting the Fed’s Stress Tests. A new paper in the Journal of Risk Management in Financial Institutions assesses the efficacy and methodology of the Federal Reserve’s bank stress tests, which it has been conducting since 2009. Fed officials often credit the stress tests and the transparency they said these introduce for halting the slide in financial markets early that year. “The US experience suggests that annual supervisory stress tests can help link micro-prudential supervision to macro-prudential objectives; however, the value of supervisory stress tests is best assessed within the context of the broader supervisory programs they support,” the authors write. http://bit.ly/1l79cvI

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